Tech —

China licenses (non-Chinese) 3G wireless standards

After several years of trying to develop its own national 3G standard, China …

China has finally announced its licensing plans for the future of high-speed mobile Internet within the country after numerous delays affected a plan to roll out 3G network services on its own TD-SCMA standard. China still intends to develop and pursue TD-SCMA technology, but it will now allow the construction of networks based on the CDMA 2000 and WCDMA standards. The former is most popular in North America, while WCDMA is heavily used in Europe, Japan, and Asia.

Handset manufacturers will undoubtedly trip over each other in their attempts to win over Chinese customers, but the government has yet to announce which Chinese providers will be given which licenses or what phones companies will be allowed to offer.

Currently, only native Chinese companies are allowed to provide cellular service within the country; it seems likely that China will move to protect its handset manufacturers as well if it feels they are being undermined by international sales. These sorts of protectionist policies have been in place for years, and the entire point of TD-SCMA is to avoid complete reliance on Western technology. Presumably, international handset manufacturers or communication equipment providers will be allowed to license the TD-SCMA standard, but that point has not been specifically confirmed.

China will begin issuing licenses for TD-SCMA early next year, but the country hasn't stated if CDMA 2000 and WCDMA licenses will be distributed simultaneously.

The potential market for all three standards is enormous. At present, China has an estimated 600 million cell phone customers; some analysts have estimated that up to 150 million 3G customers could be online by 2010. There's no word on how many of those customers would be newcomers as opposed to current users upgrading to a new phone, but the ability to sell 3G data plans with the relevant feature sets included will open multiple new revenue streams for the country's service providers.

How much of that revenue will be allowed to fall into the hands of even prominent handset manufacturers will continue to be an open question. Apple and China Mobile have been dickering over offering the iPhone in an Oriental flavor for months, with China Mobile admitting that its customers want the phone on one hand while referring to the iPhone "problem" back in March. Recent analyst projections call for a China iPhone in the first half of 2009, despite past negotiation difficulties.